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Regional GDP in OECD countries: How has inequality developed over time?

Author

Listed:
  • Felix Arnold

    (OECD)

  • Hansjörg Blöchliger

    (OECD)

Abstract

This paper surveys the state and evolution of GDP per capita in 281 regions of OECD countries for the time period 1995 – 2013. It puts a special focus on the disparities between the regions. These can be substantial: In 2013, GDP per capita of the least and most developed region varied by a factor of roughly ten. Using standard inequality measures like the coefficient of variation or the Gini coefficient, it is found that inequality has been decreasing between countries, while within-country disparities have often widened. Furthermore, transition matrices reveal that mobility within the distribution over time is higher in countries with larger degrees of fiscal decentralisation. This suggests that decentralisation allows regions to “take matters into their own hands”. Implications of other factors that correlate with the level of economic development are also discussed. Le PIB régional dans les pays de l'OCDE : comment les inégalités ont-elles évolué au fil du temps ? Nous étudions dans ce document l'état et l'évolution du produit intérieur brut (PIB) par habitant dans 281 régions de pays de l'OCDE au cours de la période 1995-2013. Nous mettons l'accent sur les disparités entre régions, qui peuvent être substantielles. En 2013, le PIB par habitant variait d'un facteur de 1 à 10 environ entre les régions les moins développées et les plus développées. À partir de mesures classiques des inégalités telles que le coefficient de variation ou le coefficient de Gini, nous parvenons à la conclusion que les inégalités ont diminué entre les pays, tandis que les disparités se sont souvent accentuée à l'intérieur de chaque pays. En outre, des matrices de transition montrent que la mobilité à l'intérieur de la distribution au fil du temps est plus forte dans les pays caractérisés par un degré relativement élevé de décentralisation budgétaire. Cela laisse à penser que la décentralisation permet aux régions de « prendre les choses en mains ». Nous examinons également les implications d'autres facteurs corrélés au niveau de développement économique.

Suggested Citation

  • Felix Arnold & Hansjörg Blöchliger, 2016. "Regional GDP in OECD countries: How has inequality developed over time?," OECD Economics Department Working Papers 1329, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:1329-en
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    File URL: http://dx.doi.org/10.1787/5jlpq7xz3tjc-en
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    Keywords

    GDP-per-capita; inequality; regions;

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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